Opinion
A146930
01-25-2017
ROBERT L. GARRETT, Plaintiff and Respondent, v. MARGARET L. NARRON, as Trustee, etc., Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco City & County Super. Ct. No. CGC-13-535531)
Margaret L. Narron, as trustee of a family trust, filed an unlawful detainer action against Nick C. Gray and Robert L. Garrett (collectively, respondents)., Throughout the action, Narron was represented by Herman Franck. The action was terminated after the trial court granted respondents' unopposed motion to dismiss. Respondents subsequently sued Narron and Franck for malicious prosecution. Narron filed an anti- SLAPP motion, which the trial court denied. Narron now appeals, arguing respondents cannot show a probability of prevailing on their malicious prosecution action because the dismissal of the unlawful detainer action was not a favorable termination on the merits. We affirm.
Gray died on May 10, 2015, several months before this appeal was filed. While the case was pending on appeal, Gray's attorneys moved to be relieved as counsel, asserting they did not agree to represent Gray's estate. We granted the motion. In February 2016, Garrett substituted into the case in propria persona. Garrett has filed a respondent's brief, but Gray's estate has not.
Narron has objected to Garrett's brief, arguing it contains self-serving statements of fact without citation to the record. The objection has merit, and we disregard any factual assertions that are not supported by the record. Narron also requests we strike the documents attached to Garret's brief, since most of the attachments are duplicative of the appellant's appendix and the rest are privileged and unnecessary. The request is moot, as we have not relied on any of these documents in rendering our decision.
SLAPP is an acronym for "strategic lawsuit against public participation." (Jarrow Formulas, Inc. v. La Marche (2003) 31 Cal.4th 728, 732, fn. 1.)
I. BACKGROUND
This case arises out of a dispute between Narron and respondents concerning Narron's San Francisco property. In 2003, Narron, as trustee of the Survivor's Trust of the Narron Family Trust, transferred title of the property to herself. About four years later, respondents reached an oral agreement with Narron to rent an in-law apartment on the property for $900 per month.
In 2008, Narron informed respondents she intended to move to Colorado to be closer to her children. The three agreed respondents would manage and repair the property to make it marketable for short-term rentals, and Narron would cover respondents' out-of-pocket expenses. In or around August 2008, Narron began accepting respondents' services in lieu of cash as rent for the in-law apartment. Respondents agreed to defer reimbursement for their expenses until the property was rented. The parties entered into a written management agreement in November 2008. Respondents designed a vacation rental Web site and began renting out the property sometime thereafter. They claim Narron deferred reimbursing their expenses because her money was tied up in an action filed by Narron's daughter to remove Narron as trustee of one of the Narron family trusts.
In June 2011, Narron told respondents she intended to move back to San Francisco, but they should continue booking the house through May 2012. Sometime in August 2011, Narron said she wanted to move into the in-law apartment, and she asked respondents to vacate the premises before June 2012. In October 2011, after a contentious conversation, Narron told respondents they now had to move out by January or February 2012. The relationship deteriorated from there. Narron filed six police reports against respondents between February and May 2012. In February 2012, Narron changed the locks on the property and told respondents to stop arranging rentals. According to respondents, Narron also refused to reimburse them for any of the expenses they had incurred in managing the property.
Litigation ensued. In June 2013, respondents filed a collection action against Narron. Around the same time, Narron served on respondents a three-day notice to quit, asserting they breached their rental agreement by failing to vacate by May 31, 2012. As trustee of the Narron Family Decedents Trust, Narron also filed an unlawful detainer action against respondents. The trust retained Franck to prosecute the action. According to the complaint, respondents failed to move out by May 31, 2012, as agreed by the parties, and Narron had not received rent since November 2011.
Respondents moved to quash. Before the motion was heard, Narron amended her complaint. Respondents demurred, arguing Narron, not the trust, was the true owner of the property. The trial court sustained the demurrer with leave to amend.
Around that time, Narron transferred title of the property from herself as an individual to herself as trustee of the Survivor's Trust of the Narron Family Trust. Narron then filed a second amended complaint, with herself as plaintiff. Respondents moved to strike on the ground the complaint was filed in violation of the court's prior order. In the alternative, respondents moved to quash, arguing the court lacked jurisdiction because the complaint failed to allege compliance with the just cause requirements of the San Francisco Residential Rent Stabilization and Arbitration Ordinance. The trial court denied the motion to strike as untimely, but granted the motion to quash "because there ha[d] not been a proper substitution of the plaintiff."
It appears the trial court may have confused the motion to quash with the motion to strike, though neither party raises the issue.
Respondents subsequently noticed and filed a motion to dismiss pursuant to Code of Civil Procedure section 581. Respondents argued that, under California Rules of Court, rule 3.1320(g), Narron had five days to amend her complaint after the order granting their motion to quash. As Narron failed to amend, respondents argued, section 581, subdivision(f)(2) granted the court the authority to dismiss with prejudice upon the filing of an ex parte application. According to the motion, the trial court had indicated it would require a noticed motion in this case. The trial court granted the motion and entered judgment in favor of respondents on November 26, 2012. The court reasoned judgment was proper because Narron had failed to amend within the time allowed.
All statutory references are to the Code of Civil Procedure.
Respondents filed an action for malicious prosecution and negligence against Narron and Franck on November 18, 2013, and filed an amended complaint several days later. Both Franck and Narron moved to strike the amended complaint pursuant to California's anti-SLAPP law, codified at section 425.16.
Franck's motion was denied as to respondents' claim for malicious prosecution, and while Narron's motion was still pending, we issued an opinion affirming the order on Franck's motion. (Gray v. Franck (Mar. 27, 2015, A141611) [nonpub. opn.] (Gray).) Among other things, Franck had contended respondents could not show a probability of success on their claim for malicious prosecution because the judgment in the underlying unlawful detainer action was based on a lack of standing and thus did not reflect on the merits of the case. He pointed out respondents' motion to quash was granted because Narron had failed to substitute proper parties, not on any substantive grounds. We rejected this argument because the order on the motion to quash did not dispose of the unlawful detainer action. Judgment was entered only after the trial court granted respondents' unopposed motion to dismiss. This suggested the action may have been dismissed due to a failure to prosecute, which would reflect on the merits.
At oral argument in Gray, Franck's counsel asserted Narron had no grounds to challenge the motion to dismiss because it was akin to a motion for judgment. According to counsel, the trial court had denied Franck leave to amend when it granted the motion to quash. Thus, counsel argued, there was nothing more Franck could do to prosecute the unlawful detainer action. We rejected this argument because Franck had failed to provide an adequate record. His appendix did not include the motion to dismiss, the order disposing of that motion, or any record of Narron requesting or the trial court denying leave to amend after the motion to quash was granted. Without these documents, we could only speculate as to whether Franck's description of the proceedings was accurate.
After we issued our decision in Gray, supra, A141611, Narron renoticed her anti-SLAPP motion. Sometime before this, respondents dismissed their claim for negligence. Narron asserted respondents' remaining claim for malicious prosecution arose from protected activity and respondents could not show a likelihood of success on the merits on that claim. As to the latter argument, Narron argued her underlying unlawful detainer action had been dismissed based on her lack of standing or her failure to amend, neither of which reflected a favorable termination for the purposes of a malicious prosecution claim.
The trial court denied the motion. While the malicious prosecution claim arose from protected activity, respondents had satisfied their burden of showing a probability of prevailing on the merits. The court explained: " 'The determination of the reasons underlying the dismissal is a question of fact.' [Citation.] Here, it is not clear that the dismissal was based on a lack of standing. As the Court of Appeal held, it could equally be based on a failure to prosecute, which is a termination on the merits."
II. DISCUSSION
A. Anti-SLAPP Motion
Pursuant to the anti-SLAPP statute, a party may move to dismiss "certain unmeritorious claims that are brought to thwart constitutionally protected speech or petitioning activity." (Robinzine v. Vicory (2006) 143 Cal.App.4th 1416, 1420-1421.) The statute provides: "A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1).)
In evaluating an anti-SLAPP motion, a court conducts a two-step analysis. "First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech.' " (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Second, if the defendant makes such a showing, the burden shifts to the plaintiff to demonstrate a probability of prevailing on the claim, "i.e., to proffer a prima facie showing of facts supporting a judgment in the plaintiff's favor." (Chavez v. Mendoza (2001) 94 Cal.App.4th 1083, 1087.)
The outcome of the first step of the inquiry is not in dispute here. The anti-SLAPP statute defines " 'act in furtherance of a person's right of petition or free speech' " to include "any written or oral statement or writing made before a . . . judicial proceeding . . . ." (§ 425.16, subd. (e).) Thus, the statute dictates respondents' claim for malicious prosecution arises from protected activity because every such claim necessarily depends upon the written and oral statements in prior judicial proceedings. (See Daniels v. Robbins (2010) 182 Cal.App.4th 204, 215.)
The question presented here relates to the second step of the test. Specifically, did respondents meet their burden of establishing a probability they would prevail on their claim for malicious prosecution. (See § 425.16, subd. (b)(1).) The Legislature did not intend for courts to weigh conflicting evidence to determine whether it is more probable than not that a plaintiff will prevail on the claim, "but rather intended to establish a summary-judgment-like procedure available at an early stage of litigation." (Taus v. Loftus (2007) 40 Cal.4th 683, 714.) "The court considers the pleadings and evidence submitted by both sides, but does not weigh credibility or compare the weight of the evidence. Rather, the court's responsibility is to accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant's evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law." (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.) Whether the plaintiff has established a prima facie case is a question of law, which we review de novo. (Ibid.) B. Probability of Prevailing on Malicious Prosecution Cause of Action
In light of the principles favoring open access to the courts, malicious prosecution is disfavored as a cause of action. (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4th 478, 493.) Accordingly, the elements of malicious prosecution have been carefully circumscribed so the prospect of such a claim will not deter litigants from bringing potentially valid claims to court. (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 872.) To prevail on a claim for malicious prosecution, a plaintiff must prove three elements: (1) the defendant commenced a lawsuit which was pursued to termination in plaintiff's favor, (2) the defendant lacked probable cause to bring the prior lawsuit, and (3) the prior lawsuit was initiated with malice. (Citi-Wide Preferred Couriers, Inc. v. Golden Eagle Ins. Corp. (2003) 114 Cal.App.4th 906, 911.) Narron now focuses on the first element. Her arguments on this point are substantially similar to those raised by Franck in his prior appeal, and they fail for the same reasons. Narron also contends she has a complete defense to respondents' claim for malicious prosecution because she decided to bring the unlawful detainer action based on the advice of counsel. She waived this argument by failing to properly raise it below.
1. Favorable Termination
Like Franck, Narron argues a dismissal for lack of standing is not a favorable termination for the purposes of a malicious prosecution action. However, as we discussed in our opinion on Franck's appeal (Gray, supra, A141611), the underlying unlawful detainer action was not dismissed for lack of standing. The trial court initially granted respondents' motion to quash on standing grounds. However, that did not end the matter. Judgment was entered only after Narron declined to amend her pleading and failed to oppose respondents' motion to dismiss. From this, we can reasonably infer the underlying action was dismissed based on Narron's failure to prosecute. As explained in Minasian v. Sapse (1978) 80 Cal.App.3d 823 (Minasian) at page 827: "A dismissal for failure to prosecute . . . does reflect on the merits of the action, and that reflection is favorable to the defendant in the action. The reflection arises from the natural assumption that one does not simply abandon a meritorious action once instituted." Narron contends she failed to amend not because her claims lacked merit, but because of a breakdown in the relationship with Franck, her attorney. But Narron's explanation merely raises a fact question, which cannot be resolved on an anti-SLAPP motion. (See Taus v. Loftus, supra, 40 Cal.4th at p. 714 [courts cannot weigh conflicting evidence in deciding anti-SLAPP motion].)
At oral argument, Narron argued Minasian is inapposite because it concerned the two-year failure to prosecute provision of former section 583, subdivision (a), while in the instant action, the trial court granted a motion to dismiss pursuant to section 581, subdivision (f)(2), which allows for dismissal where a plaintiff fails to amend a pleading after a demurrer is sustained with leave to amend. As both former section 583 and section 581 allow for dismissal in the event a plaintiff fails to prosecute an action, we conclude Minasian applies here.
Narron also argues that, regardless of her reasons for declining to amend her pleading or oppose respondents' motion to dismiss, failure to prosecute does not reflect on the merits for the purposes of adjudicating a malicious prosecution claim. The contention is directly at odds with Minasian, supra, 80 Cal.App.3d 823. Moreover, the authority cited by Narron is inapposite. Campanella v. Campanella (1928) 204 Cal. 515 states that, when a plaintiff voluntarily dismisses an action, the dismissal is not on the merits and thus does not operate as a bar or estoppel in subsequent proceedings involving the same matters. (Id. at 520.) The opinion does not address whether a claim for malicious prosecution fails where the underlying action was voluntarily dismissed. Neither does Oeth v. Mason (1967) 247 Cal.App.2d 805, which cites Campanella for the uncontroversial principle that a case is not decided on the merits where it is dismissed because of a plaintiff's failure to appear at trial. (Oeth, at p. 810.) As neither Campanella nor Oeth discuss the elements of malicious prosecution, they have no bearing on this matter.
Narron also asserts her anti-SLAPP motion does not suffer from the same deficiencies as Franck's because, unlike Franck, she provided a full record of the proceedings in the underlying unlawful detainer action. The argument is unavailing. In his prior appeal, Franck had argued Narron's case was not dismissed due to a failure to prosecute. He explained he did not amend Narron's pleading after the trial court granted the motion to quash because leave to amend had been denied. Franck also argued he declined to oppose the later-filed motion to dismiss because it was tantamount to a motion for judgment and, given the disposition of the motion to quash, there was nothing he could do to avoid dismissal. We stated we could not evaluate these arguments because Franck had failed to include in the record the motion to dismiss and the order on the motion. Narron did submit these documents. But they do not support a finding the unlawful detainer action was dismissed for a reason other than failure to prosecute. Contrary to Franck's representations in his appeal, the documents show Narron had an opportunity to amend after respondents' motion to quash was granted. Because Narron declined to amend, the trial court later granted respondents' unopposed motion to dismiss. Narron's failure to amend raises the inference the action was dismissed for failure to prosecute, which in turn raises the inference dismissal was on the merits, as one with a meritorious action generally does not abandon it.
2. Advice of Counsel
Narron asserts she has a complete defense to respondents' malicious prosecution action because she relied in good faith on the advice of her counsel in bringing and prosecuting the underlying unlawful detainer action. The trial court rejected this argument because Narron failed to raise it in her moving papers below. Narron argues the trial court erred in disregarding this argument because it was raised in the reply in support of her motion. She contends it was proper to wait to raise the issue for the first time on reply because a moving party's initial burden on an anti-SLAPP motion is simply to show the challenged cause of action arises from protected activity. We disagree. That the anti-SLAPP statute sets forth a two-step, burden-shifting analysis does not mean the moving papers need only discuss the moving party's burden. To hold otherwise would be an affront to due process, allowing anti-SLAPP defendants to sandbag their opponents with new arguments on reply. It is hornbook law that "[p]oints raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument." (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.) Moreover, it appears Narron herself did not believe arguments concerning the probability of success on the merits should be reserved for reply, as her moving papers included extensive discussion of the issue. Based on this record, we cannot conclude the trial court abused its discretion in disregarding new arguments raised on reply.
At oral argument, Narron asserted respondents should have been on notice of her contentions regarding advice of counsel because she raised them in the moving papers of her first anti-SLAPP motion. But the pertinent question is whether the argument appeared in the moving papers of Narron's renoticed motion, as that was the motion ultimately decided by the trial court and the motion respondents opposed. Respondents could have reasonably concluded Narron no longer intended to pursue the advice-of-counsel argument when that argument did not appear in the moving papers filed in connection with Narron's renoticed motion. --------
III. DISPOSITION
The order denying Narron's anti-SLAPP motion is affirmed. The parties shall bear their own costs on appeal.
/s/_________
Margulies, J. We concur: /s/_________
Humes, P.J. /s/_________
Banke, J.